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Regime Critics Risk Losing Tax-Exempt Status

The message from California is clear: defiance of the regime will strip you of your nonprofit status.

Lambda Legal West Coast Liberty Awards 2018

State Senator Scott Wiener ((Photo by Randy Shropshire/Getty Images for Lambda Legal)

The January 6 Committee is not the only government entity trying to punish critics of the regime for alleged insurrection. Lawmakers in California are following suit, weaponizing their authority over the not-for-profit sector.

The “No Tax Exemption for Insurrection Act,” introduced earlier this year by California legislator Scott Wiener, is percolating through bureaucratic committees, making its way to Governor Gavin Newsom’s desk. If signed, Senate Bill 834 would rescind the tax-exempt status of any nonprofit involved in or inciting efforts to “overthrow the United States Government or any state government.” Wiener stated that the bill would also prevent nonprofits based outside of California that engage in activity deemed treasonous from fundraising in the Golden State. 

This is the latest action taken by policy makers to send a clear message to NGOs: Any direct or indirect participation in the events of January 6 erroneously characterized by the media and the J6 committee as treasonous activity—and any future acts of defiance of the regime—will strip you of your nonprofit status.   

To be sure, organizations that engage in criminal activity, such as destroying government property, should have their tax-exempt status revoked. But the open-ended language of the bill makes it easy to punish organizations that “incite” violence, the interpretation of which is subject to the discretion of the attorney general. 

There is an established legal standard for an individual to meet the qualifications for “incitement” of violence. But as the left moves further in the direction of classifying speech it doesn’t like as “violence,” First Amendment protections go out the window. The proposed bill would give state authorities the power they need to combat the effectiveness of conservative-minded organizations that challenged the authority of the ruling class in 2020. 

It is true that some restrictions on freedom of speech already exist for nonprofits. The most obvious example of this pertains to political activity. The Internal Revenue Code holds that “all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.” But SB-834 goes further, restricting the actions of organizations that think the 2020 election was nefariously conducted and were labeled “insurrectionists” by the media regime. 

Wiener openly admits that this bill is an attempt to block conservative groups from profiting off of well-sourced claims that the 2020 election was stolen.

Authoritarian and anti-democratic organizations have increasingly used the “Big Lie” to fundraise, and this narrative has driven millions of dollars in tax-exempt donations. And many new organizations have cropped up in the past year, hoping to ride the coattails of the insurrection and cash in. These include California nonprofits and nonprofits registered in other states that fundraise in California. These organizations, which are fundamentally undermining our democracy and cheering for the destruction of free and fair elections in America, should not be allowed to operate with advantages like tax-exempt status.

Lamenting the donations that have been made to groups skeptical of the legitimacy of the 2020 election, Wiener is retaliating with the strength of the state government to destroy nonprofits, as well as the tax write-offs of donors, who do not align with his political agenda. 

You can be sure that the rioters who engaged in actual insurrection or the destruction of government property under the organizational instruction of Black Lives Matter will not be the targets of Senate Bill 834. Many California lawmakers refused to condemn the “mostly peaceful” protests of 2020, which had their fair share of insurrectionist activity. 

It is well-documented that the bureaucratic authorities that determine the rules surrounding tax-exemption are no friend to conservative groups. Recall the Obama-era IRS scandal, during which countless nonprofits, many involved with the Tea Party, were targeted. SB-834 is a brazen partisan measure akin to the procedures of the conservative-censuring IRS, and it is a clear warning to patriotic nonprofits to stop questioning the legitimacy of the Biden regime.

This heinous tactic raises a larger question for conservative and right-of-center nonprofits. As political and ideological divisions broaden in America, is the nonprofit model even feasible for organizations that speak out against the regime? Perhaps these organizations should prepare their donors for a non-tax-deductible future. It might be time to usher in an era in which donors view contributions as investments in causes, the return of which is saving the country, not a tax write-off. 

The post Regime Critics Risk Losing Tax-Exempt Status appeared first on The American Conservative.

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